Rama Krishna Sangem
Our best is not better enough, is the message we get after going through the 13 chapter and 430 plus pages Economic Survey 2023-25, tabled in the parliament by Finance Minister Nirmala Sitharaman on January 31, Friday. The survey is prepared by Chief Economic Advisor V Anantha Nagewaran and his team, under the department of economic affairs, in the finance ministry. The Economic Survey comes a day before the union budget presentation.
The Economic Survey is not necessarily the view of the finance minister or that of the government. But, it gives us enough hints at the country’s economy and its progress in the last one year. Of course, FM Nirmala must have had knowledge of what the survey contained in it and must have factored in its key observations while preparing her budget, 8th such one since first term of PM Modi. Though the survey normally paints a rosy picture of the economy and its coming direction, CEA Nagewaran is known for making realistic assessments.
Why I said our best is not better enough has some reasons. It is not India hasn’t achieved much in the 10 years or at least last 5 years. A lot much is happening and a lot is underway. Still, the progress is nowhere, compared to our overall goals and targets or when we look at big picture of global economy. CEA Nageswaran, in every of his chapters, listed the progress in every sector and at the same time flagged concerns ahead. In a nutshell, he mentioned global uncertainties are the big X factor before India.
That means we have to work very hard, not rest at our present levels of achievements. Except in services sector, we must do a lot to improve our conditions in both agriculture and manufacturing sectors. Otherwise, we can meet our goal of Viksit Bharat by 2047. Viksit Bharat means a developed India that needs to reach a per capita income of above 10,000 US dollars and an economy of 15 to 18 trillion US dollars. Now we are at closely to 3,000 US dollars per capita income and slightly less than 4 trillion US dollars. Imagine where we are now.
“We need to raise our game”
India needs to raise its game by relying on domestic drivers of growth through deregulation at a time when globalisation will no longer provide a tailwind, Chief Economic Advisor (CEA) V Anantha Nageswaran said on Friday. Addressing a press conference on the Economic Survey 2024-25, Nageswaran told reporters, “Regulations disproportionately affect small businesses. Deregulation is not only about ease of doing business; it is also a pathway to employment.”
Highlighting the concentration risk of one country becoming the dominant source of supply, the CEA said that China’s presence is pervasive and dominant in several high- and medium-tech areas. “China’s share (of global output) will probably be higher than the combined share of the next ten countries. It gives them a lot of strategic levers and advantages,” he said.
Nageswaran stressed that as nations calibrate towards domestic priorities, globalisation may be a thing of the past. “The single-source concentration risk in several product areas exposes India to potential supply chain disruptions, price fluctuations, and currency risks. India’s task is cut out,” he said.
The CEA said that the relative slowdown in India’s current gross domestic product (GDP) growth must be seen in the context of the decline in global real economic activity since 2023. He said that India remains the fastest-growing economy in the world and must maintain a minimum level of growth amid global headwinds to achieve the Viksit Bharat goal.
“We can lift these baseline (growth) numbers, which take into account the uncertainties,” Nageswaran said.
We will grow 6.3 to 6.8 pc in ’24-25
The Economic Survey 2024-25 has projected that the Indian economy will grow between 6.3 and 6.8 per cent in the next financial year. Nageswaran said that while the growth estimates do not assume any changes in crude price outlook, no major upside risk to crude oil prices is expected in the near future. But, this is not enough to reach our developed country. We must achieve 8 per cent growth every year till 2047.
Speaking about the private sector’s role in nation-building, Nageswaran highlighted the huge disparity between profit and wage growth in companies. He said that achieving the status of a developed economy by 2047 will require a socially responsible private sector.
“Aligning profit growth with wage increases is essential for sustaining demand and supporting corporate revenue and profitability growth in the medium to long run,” Nageswaran added. He also said that the private sector needs to weigh the benefits of artificial intelligence (AI) against its social costs.
While the CEA did not comment on the idea of a 90-hour workweek proposed by Larsen & Toubro (L&T) Chairman S N Subrahmanyan, he said that better relationships with managers and colleagues, an optimal workload, and a sense of pride and purpose at work significantly improve mental well-being. He added that poor mental health reduces the number of working days and overall productivity.